Ancora Holdings, a fruitful investor activist in the transport, has again directed a look at the railway line for a smaller class I and its CEO. In progress, which reflects his successful intervention with Norfolk South, Anchora wrote a pointed letter to the CSX Corporation Board, demanding immediate action to investigate merger options.
If the surface transport advice allows the Union Pacific to acquire Norfolk Southern, then the main CSX competitor will be able to offer a hassle -free service from the shore to the shore and there is no CSX. If the CSX accepts that a BNSF merger will come and this does not actively pursue other options (such as Canadian railway), according to Anchora, this will be in a clear position in the merger negotiations and may be forced to accept a more evaluation, dictated by Berkshire Hathaway / BNSF.
“BNSF is a buyer of money that would bring a highly disciplined approach to any negotiations, which makes CSX in a vulnerable position if there are no alternative countries to talk to,” Anchora wrote.
The letter of August 6 and addressed to the independent members of the CSX board, stresses Anchora’s dissatisfaction with the company’s current trajectory under the direction of Executive Director Joe Hinrichs. Anchora emphasizes that the uncomfortable performance of CSX, especially in the light of the recent merging of Union Pacific and Norfolk, requires a quick repetition of the strategy. The letter emphasizes the urgent need for CSX to be actively engaged in merger discussions so as not to be abandoned in the rapidly developing railway sector.
CSX has been fighting in recent years, especially compared to its peers in the Class I railway sector. Anchora states that after Hinrichs took over the management in 2022, the company’s operational ratio – a critical measure of efficiency and profitability – has deteriorated significantly. From a relatively healthy 58% at the beginning of their term, the ratio was ballooned to approximately 67%, as normal operating costs consumed an increasing share of CSX revenue. This operative offering complicates investor concerns about the direction of the company, as well as its ability to compete effectively in a market, determined by extensive consolidation and competition.
Anchora’s letter to CSXDownload
In his correspondence, Anchora claims that the lack of significant achievements of Hinrichs – and his failure to take advantage of the possibilities of merging of major mergers – put CSX in a competitive flaw. The letter notes that while Union Pacific and Norfolk Southern made titles with their transcontinental merger, the CSX management was focused on less impactful initiatives, such as managing its presence on social media.